While registered account holders don’t have to immediately decide how they want to invest the money, it has to be in their account by the deadline.
The deadline for making contributions to an RRSP to be able to deduct the amount on a 2016 income tax return is March 1, 2017.
Here’s a summary of things you need to know regarding your RRSP contribution in 2016:
|Deadline||March 1, 2017 – Time of the deadline is 11:59 PM (local time)|
|Contribution Limit||The lesser of $25,370 (for 2016) or 18% of earned income from your previous tax year, minus any pension adjustments*, plus unused contribution room from previous years|
|Carry Forward||RRSP contribution room accumulated after 1990 can be carried forward indefinitely to subsequent years|
|Eligibility||Investors can contribute to an individual RRSP if they have employment or business income or unused contribution room, up until December 31 of the year they turn 71|
|Minimum Age||There is no minimum age for contributing to an RRSP. However, they must be at least 18 to contribute more than $2,000|
|Maximum Age||Anyone who has earned income in the previous year and filed a Canadian tax return can contribute to an RRSP up until December 31 of the year they turn 71
After 71, if you continue to have earned income, you can contribute to a spousal RRSP up until December 31 of the year your spouse or common-law partner turns 71